In the past, you were making use of the exemption. TT will by default use the exemption if it is feasible. That is $300 single, $600 married filing jointly. No f1116 was required to be filled out and filed.
TT can only serve one country per 1099-div. for the FTC interview. If 2 or more countries have foreign taxes in box 7, then you have to create a fictitious payer to use the step by step interview. However, you can in Forms Mode do it yourself for the 2nd payer as you have done.
The order you are referring to only applies to 2 or more copies of the f1116. There is no order with regard to the columns within a f1116.
The qualified dividends & LTCG in line 1h of the f1116 wks. is rarely used. It requires an entry for 2 possible reasons.
1. If the foreign dividends and LTCG are $20,000.00 or more.
2. If on the 1099-DIV, box 1a is less than the sum of box 1b +7d.
Having carryovers is very common. It is because the foreign taxes paid are greater than the FTC limit.
In order to reduce carryovers, the following strategy can be used.
This is an extreme case, but it shows what can be done.
You purchase dividend paying stocks from those countries that do not withhold taxes. There are about 20 of them such as the U.K., and Hong Kong. These dividends are foreign income and as such will create a FTC limit amount. Since there are no foreign taxes for the present year, TT will draw from the carryovers to max out the FTC limit. This can be repeated yearly until the carryovers are eliminated.
Foreign tax credits like any other credits are subtracted from the tax owed up to the point where the tax owed equals zero. So be aware of that limitation. What can’t be used would be carried over.
